The oil industry downturn still doesn’t seem to be having much effect on Norwegian housing prices in the most expensive categories. Brokerage firms report that sales of homes priced at more than NOK 10 million (USD 1.26 million) doubled during the first half of this year.
Homes priced at NOK 10 million or more are no longer as exclusive as they used to be. Newspaper Dagens Næringsliv (DN) reported Friday that DNB Eiendom, the real estate arm of Norway’s biggest bank, sold 19 condominiums at the new waterfront complex known as Sørenga in June alone. The average price on the eastern waterfront, once known as an industrial and relatively down-market area, was NOK 10 million.
A long period of constantly rising residential real estate prices in Norway, coupled with ever-rising household net worth and low interest rates, has led to record sales of homes once viewed as in the luxury category. Brokerage firms Privatmegleren, Eiendomsmegler 1 and DNB Eiendom all logged record sales of homes priced at more than NOK 10 million from January to through June.
‘Luxury’ becoming common
Some are even debating whether a home priced above NOK 10 million can still be considered a “luxury” home in Norway, since so many of them are on the market. Terje Halvorsen of DNB Eiendom told DN he thinks they are, while Odd Nymark of Eiendomsmegler 1 in Oslo and Akershus says they’re not.
“Household net worth has risen (largely because of higher real estate values), and interest rates are so low that many people are now able to buy more expensive homes,” Halvorsen told DN. “And many people are, especially in urban areas. I would nonetheless say that homes over NOK 10 million can be considered a luxury.”
Nymark disagrees, since the numbers of homes priced at such levels have made them more common. “It would be wrong to characterize a home priced higher than NOK 10 million as a luxury property,” he told DN. “The properties themselves indicate the standard. A small apartment priced at NOK 7 million can be more luxurious than a large family home at more than NOK 10 million.”
Sales boom from north to south
Regardless of the definition, sales of both types of properties have been exceptionally good this year. DNB Eiendom’s sales over NOK 10 million in June hit 39 compared to 16 in June of last year. Sales through the first half numbered 128, up from 77 last year. Eiendomsmegler 1 registered 24 such high-end sales during the first half, up from 10 during the first six months of 2014. Halvorsen said the most expensive sale at the Sørenga complex sold for NOK 38 million, a result of two condominiums being combined and sold as one.
The high-end sales are not restricted to the greater Oslo metropolitan area. Bergen, Trondheim and Vestfold County (southwest of Oslo) have all seen a boom in the high-end market. Grethe Meier, managing director at Eiendomsmegler 1, said the firm’s sales of 350 homes priced above NOK 10 million nationwide marked a 150 percent increase over the first half of last year. Brokers in northern city of Tromsø are also having a good year because of what they all a “red-hot” market. Fully 49 percent of homes in Tromsø sold at prices higher than what was asked, and the figure was 40 percent in June. Prices averaged NOK 41,460 per square meter and it took around 17 days to close a deal in May.